3 Reasons This Could Be the Year for Gold

Gold American Eagle bullion coins

While the past few years have been good ones for gold, they certainly could have been better. Gold demand has been strong, gold prices have grown fairly consistently, but there’s always been something that seems to be lacking.

Despite the gold price having hit all-time high in recent years, including last December and earlier this month, it just seemed like gold was having trouble building momentum and continuing to steadily keep gaining in price. But this year could be different.

Anyone who remembers how gold fared from 2008 to 2011 remembers how it just seemed like the gold price was soaring. But despite gold demand having been strong for the past several years, gold never had that kind of breakout.

2024 could be the year that that breakout occurs. And here are three reasons why this year could be the year for gold.

1. Strong Safe Haven Demand

Safe haven demand for gold has helped push the gold price upward the past several years. And with the US economy still facing recession, that demand isn’t waning.

Gold is one of those interesting assets for which demand seems to increase as the price increases, at least when it comes to investment demand. When the gold price is rising, it’s often when the economy is faltering, and many people are looking to buy gold to protect their wealth.

There are many different ways to buy gold as a safe haven or to gain exposure to the gold price, such as gold exchange-traded funds (ETFs), physical gold coins or bars, and gold IRAs. These methods of buying gold are growing in popularity, and are contributing to increased safe haven demand for gold.

2. Continued Central Bank Gold Purchases

Central banks around the world continue to add gold to their holdings at near-record levels. While China has consistently added gold to its holdings each month, other countries too are boosting their gold reserves.

For many countries this is just a part of shoring up their reserves, ensuring that they can benefit from the stability that gold offers, rather than relying exclusively on fiat currencies like the US dollar. Others are undoubtedly trying to protect their balance sheets against the likelihood of higher inflation or severe recession.

And still others are trying to ensure that they have a way to divorce themselves from the US financial system or maneuver around the far-reaching effects of US sanctions. Whatever the reason, central bank gold purchases have been a major support for gold prices, which have been ratcheting ever higher in recent years.

3. Prospect of Rate Cuts

The chance of Federal Reserve interest rate cuts can stimulate gold demand in two ways. On the one hand, extra liquidity entering the financial system tends to push up the prices of most assets, gold included.

On the other hand, rate cuts very often are followed by recession. That was the case during the last two major rate hike/cut cycles before the dotcom bubble collapse and the 2008 financial crisis.

For that reason, rate cuts could be seen as a sign that the economy is on the brink of recession. And when economies face recession, gold demand tends to increase as people seek safe haven assets to protect their wealth.

Rate cuts aren’t guaranteed this year, although markets seem to expect them, and the Fed still says that it expects to cut rates at least three times this year. And with the Fed also signaling that it may be more willing to accept higher inflation, we could be inching ever closer to rate cuts.

Put Gold to Work For You

While demand for gold has been strong in recent years, that demand could continue to grow if the economy falls into recession. Many Americans have already taken the plunge and bought gold to help protect themselves against a potential economic downturn, but many others have yet to do the same.

During the 2008 financial crisis, the gold price gained 25% during the same time period markets fell over 50% (October 2007 to March 2009), and gold continued to gain after that. Undoubtedly many people who watched their hard-earned investments lose value watched with envy as gold continued to grow.

That’s perhaps one reason gold demand has been so strong in recent years, that people who remember how gold performed back then are hoping to take advantage of similar price growth during the next recession.

While many people are buying gold through direct cash purchases, many also are taking advantage of gold IRAs to protect their tax-advantaged assets. Gold IRAs function the same as any other IRA, only that they own physical gold coins or gold bars.

Since you can’t own physical gold in a 401(k), funding a gold IRA through a 401(k) rollover has become a popular option. With a 401(k) to gold IRA rollover, you can bypass annual IRA contribution limits, protect your existing tax-advantaged assets, and benefit from future gold price growth.

Rollovers and transfers from 401(k), 403(b), TSP, IRA, and similar retirement accounts into a gold IRA can be done tax-free, allowing you to benefit from owning gold without having to take a tax hit by taking an early distribution.

Goldco has helped thousands of customers benefit from gold IRAs, with over $2 billion in precious metals placements and over 5,000 5-star reviews. Our representatives are happy to answer any questions you may have about how gold IRAs work, the gold purchase process, or the quality of the gold coins and bars we sell.

Goldco has worked hard to make ourselves one of the best and most-trusted gold companies in the industry. Whether you’re interested in a gold IRA or just want to make a direct cash purchase of gold, we have gold coin and bar options available for everyone.

Don’t let your hard-earned savings fall victim to a 2008-style recession. Call Goldco today to learn more about how gold can help you protect your hard-earned savings.


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